Pay calculator / Medicare levy surcharge
Medicare levy surcharge calculator (2026-27).
What the surcharge costs you without private hospital cover - and the number that actually decides it: the most a policy can cost before you're better off just paying the surcharge.
Medicare levy surcharge, 2026-27
$1,200
You're in the 1% tier on a single income of $120,000. That comes out of your pay on top of the $2,400 Medicare levy.
Threshold
$105,000
Take-home without cover
$89,880
With cover
$91,080
Break-even: $1,200 a year
That is the most a basic hospital policy can cost before you are worse off than paying the surcharge - about $100 a month. Below that you get a product for money you were spending anyway; above it, the surcharge is cheaper. Hospital cover is what counts - extras-only policies do not exempt you.
It is charged on your income, not the household's
The household total decides which tier you are in, but the surcharge is levied on YOUR income for surcharge purposes. Two people in a family are each assessed on their own income at the shared tier rate.
The tiers for 2026-27
| Tier | Single | Family | Surcharge |
|---|---|---|---|
| Base tier | Up to $105,000 | Up to $210,000 | Nil |
| Tier 1 | $105,001 - $123,000 | $210,001 - $246,000 | 1% |
| Tier 2 | $123,001 - $164,000 | $246,001 - $328,000 | 1.25% |
| Tier 3 | $164,001 and over | $328,001 and over | 1.5% |
Income for surcharge purposes is taxable income plus reportable fringe benefits, reportable super contributions and net investment losses; this uses the income you enter. The family threshold rises $1,500 per child after the first. You are exempt for any period you held an appropriate private HOSPITAL policy - extras cover does not count - and the surcharge is pro-rated for part of a year. The private health insurance rebate is separate and shrinks as income rises, which is worth checking before comparing premiums. General information only, not tax or health insurance advice.
Where the threshold has been, year by year
| Year | Single starts at | Family starts at |
|---|---|---|
| 2026-27 | $105,001 | $210,001 |
| 2025-26 | $101,001 | $202,001 |
| 2024-25 | $97,001 | $194,001 |
| 2023-24 | $93,001 | $186,001 |
| 2022-23 | $90,001 | $180,001 |
| 2021-22 | $90,001 | $180,001 |
| 2020-21 | $90,001 | $180,001 |
The thresholds were frozen from 2014-15 through 2022-23 and have been indexed every year since, which is why more people have drifted into the surcharge without their income changing in real terms.
Common questions
→What is the Medicare levy surcharge?
An extra 1% to 1.5% of your income, charged on top of the ordinary 2% Medicare levy, if you earn above the threshold and do not hold private hospital cover. It exists to push higher earners into private cover and take pressure off the public system. It is not a tax on your health - it is a charge for not having a policy.
→What are the thresholds for 2026-27?
The surcharge starts at $105,000 for a single and $210,000 for a family. Between $105,001 and $123,000 it is 1%, from $123,001 to $164,000 it is 1.25%, and above $164,001 it is 1.5%. Family thresholds are double those figures and rise a further $1,500 for each dependent child after the first.
→Is it cheaper to just take out private hospital cover?
Usually, if you are over the threshold, because the money leaves your pocket either way. The break-even is simply the surcharge amount: if a basic hospital policy costs less than the surcharge you would have paid, you are in front and you get a product for it. Above that the surcharge is the cheaper option. This calculator gives you the break-even figure directly.
→Does extras cover exempt me?
No. Only an appropriate private HOSPITAL policy exempts you. Extras-only cover - dental, optical, physio - does not, and this catches people out every year. The policy also needs an excess at or below the annual limit to qualify.
→How does the surcharge work for couples and families?
The tier is set by your COMBINED income, but the surcharge is charged on each person's own income for surcharge purposes. You are also both liable if either of you is uninsured. One exception worth knowing: if your own income is below the Medicare levy low-income threshold, you do not pay the surcharge even when the household is over the family threshold.
→What if I only had cover for part of the year?
The surcharge is worked out day by day, so a policy that started in October exempts you from October. This calculator shows the full-year figure - divide by 365 and multiply by your uninsured days for a part-year estimate.
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